TaxTMI 
TaxTMI 
2018 (4) TMI 431
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..... 3,19,00,726/- from Prerna Mercantile Pvt Ltd." 3. First issue concerns addition of Rs. 52,50,000/- being a part of income allegedly disclosed during the course of survey but not reflected in the return of income. 4. The facts concerning the issue are that a survey was conducted in the business premises of the assessee under Section 133A of the Act on 22.10.2010. In the course of survey, statement of one of the Directors Shri Suresh Agrawal was recorded under Section 133A of the Act. The Assessing Officer noted that the aforesaid Director had disclosed an amount of Rs. 4,50,00,000/- on account of profits arising from projects namely 100 Acres (Scheme of the company) Share of Dhara Infrastructure (JBR Residency and JBR Arcade) and towards unexplained credits etc. The Assessing Officer in the course of assessment, however, found that the assessee has included Rs. 3,97,50,000/- only towards such disclosure in the return of income filed for the year under consideration as against the disclosure made of Rs. 4,50,00,000/- in the course of survey. The Assessing Officer accordingly added the difference in disclosure amounting to Rs. 52,50,000/- to the total income of the assessee be....
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....,000/- as, in his opinion, the appellant did not honour the disclosure of Rs. 4.5 crores made during the course of survey conducted by the Dept on the premises of the appellant. The appellant had shown additional unaccounted income of Rs. 3,97,50,0007- only. Accordingly the AO made the addition of the balance amount. The appellant on the other hand has submitted that it has honoured the disclosure made by it during the course of survey. It has been pointed out by him that during the course of survey in the statement of Shri Suresh Agrawal was recorded. He stated that his son Vineet Agrawal handled the affaires of the company and after consulting him for current FY 2010- 11 a disclosure of Rs. 4.5 crores was made. Subsequently the statement of Shri.Vineet Agrawal, the director and the main person of the appellant company was recorded who stated that he confirmed the disclosure of Rs. 4.5 crores including the current year's income. In view of these facts it has been submitted by the appellant that the income offered including the current year's income is as per the statement made during the course of survey. After examining the relevant facts it is noted fro....
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....n the survey. It is also observed from the records and the submission given by the appellant that no incriminating documents were found indicating any receipt of on money etc. The assessing officer has also not recorded any specific fact indicating to the income which Is based on any documents found during the course of search. The addition has only been made on the basis of two statements which are recorded during the course of survey. As discussed above the appellant has honoured the disclosure made by it during the course of survey and the difference has arisen on account of interpretation of the same statement made by the AO. In view of the above discussion, I am of the considered opinion that the AO was not justified in making the addition of Rs. 52,50,000/-to the income of the appellant on the basis of statement recorded during the survey. The same is therefore, directed to be deleted. The ground of appeal is accordingly, allowed." 6. Aggrieved, the Revenue is in appeal before the Tribunal. 7. We have heard the rival submissions on the issue and perused the orders of the authorities below and judicial precedents cited. A perusal of the orders of the authorities....
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....e the lender in person and accordingly held that the genuineness and creditworthiness remained unestablished. The Assessing Officer accordingly added the aforesaid sum of Rs. 3,19,00,726/- to the total income of the assessee with the aid of Section 68 of the Act. 11. Aggrieved, the assessee preferred appeal before the CIT(A). Before the CIT(A), the assessee contended that, apart from the loan confirmation, the Income-tax Return, balance-sheet and Profits & Loss account of the lender as well as its bank statement were also collected by the Assessing Officer which clearly establishes the identity, creditworthiness and genuineness of the transactions. The assessee next contended before the CIT(A) that the assessee had taken loan of Rs. 80 lakhs from the aforesaid lender (M/s. Prema Mercantile Pvt Ltd) in the earlier year which is shown as opening balance during the year. Thus, apart from the brought forward outstanding, the assessee took further loan of Rs. 3 Crores during the year on which the assessee also paid interest of Rs. 21,11,918/- to the lender during the year. The assessee also deducted TDS of Rs. 2,11,192/- on the interest payments. The Assessing Officer has wrongly con....
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....rdingly no addition should have been made by the AO. It has also been submitted by the appellant that insistence for producing the directors of Prema Mercantile was unjustified as the appellant had duly discharged its onus. On a careful consideration of the entire facts of the case, it is noted that the appellant has furnished confirmation giving the loan. It has also furnished data from the ROC, which indicates the name of the directors and shareholding pattern of the company. AH the schedules from the return filed with ROC for the relevant year were also submitted. Bank statement of that company, in which the loan given has been shown, as well as the Ledger account of the appellant company in the books of that company was also submitted. Further the AO also issued a notice under section 133(6) which has also been complied by Prema Mercantile. During the course of appellate proceedings I have called the assessment records and perused the same, It was noted that the reply to the notice issued by the AO has been submitted by Prema Mercantile and the fact of giving loan has duly been confirmed by it. These facts clearly show that the appellant has duly discharged its onus by....
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....d order passed by Tribunal did not require any interference - Held, yes [Para 4] [In favour of assessee]". In view of the above discussion and the preponderant opinion given by honourable Gujarat High Court the addition made by the AO on account of unexplained cash credit received during the year is directed be deleted. The ground of appeal is accordingly, allowed." 12. The CIT(A), accordingly deleted the additions made by the Assessing Officer under Section 68 of the Act. 13. The Revenue has challenged the legitimacy of the action of CIT(A). 14. We have heard the rival submissions made in this regard and perused the orders of the authorities below as well as the judicial precedents cited in this regard. The issue in dispute is whether unsecured loan of Rs. 3,19,00,726/- taken by the assessee from the lender M/s. Prema Mercantile Pvt Ltd can be treated as unexplained cash credit in the facts and circumstances of the case or not. A perusal of the order of the CIT(A) clearly brings out the fact that the lender is not a stranger to the assessee. The assessee has availed loan in the earlier year of significant amount which has been considered bonafide on the ....